Indian GAAP, IFRS and Ind AS - A Comparison

Indian GAAP, IFRS and Ind AS
A Comparison
26 February 2015

Indian GAAP, IFRS and Ind AS A Comparison | 3
The Roadmap for Implementation of Ind AS 4
Comparison of Indian GAAP, IFRS and Ind AS 5
Comparison 6
Contents
Updated for the Companies (Indian Accounting Standards) Rules, 2015

4
The Roadmap for
Implementation of Ind AS
On 16 February 2015, the Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards)
Rules, 2015 (the ‘Rules’) (pending publication in the Gazette of India). The Rules specify the Indian Accounting
Standards (Ind AS) applicable to certain class of companies and set out the dates of applicability.
The key requirements of the Rules with regard to the class of companies that will be required to follow Ind AS and
the date of adoption by such companies are as under:
Voluntary adoption
Companies may voluntarily adopt Ind AS for financial statements for accounting periods beginning on or after
1 April 2015, with the comparatives for the periods ending 31 March 2015 or thereafter. Once a company opts to
follow the Ind AS, it will be required to follow the same for all the subsequent financial statements.
The roadmap will not be applicable to:
• Companies whose securities are listed or in the process of listing on SME exchanges.
• Companies not covered by the roadmap in the “Mandatory adoption” categories above.
• Insurance companies, banking companies and non-banking finance companies.
These companies should continue to apply existing Accounting Standards prescribed in the Annexure to the
Companies (Accounting Standards) Rules, 2006, unless they opt for voluntary adoption. Insurance companies,
banking companies and non-banking finance companies cannot voluntarily adopt the Ind ASs.
Mandatory adoption
For the accounting periods beginning on or
after 1 April 2016
For the accounting periods beginning on or after 1
April 2017
• The following companies will have to adopt Ind AS
for financial statements from the above mentioned
date:
- Companies whose equity and/or debt securities
are listed or are in the process of listing on any
stock exchange in India or outside India (listed
companies) and having net worth of Rs. 500
crores or more.
- Unlisted companies having a net worth of Rs. 500
crores or more.
- Holding, subsidiary, joint venture or associate
companies of the listed and unlisted companies
covered above.
• Comparative for these financial statements will be
periods ending 31 March 2016 or thereafter.
• The following companies will have to adopt Ind AS for
financial statements from the above mentioned date:
- Listed companies having net worth of less than
Rs. 500 crore.
- Unlisted companies having net worth of Rs. 250 crore
or more but less than Rs. 500 crore.
- Holding, subsidiary, joint venture or associate
companies of the listed and unlisted companies
covered above.
• Comparative for these financial statements will be
periods ending 31 March 2017 or thereafter.

The table on the following pages sets out some of the key differences between Indian GAAP (including the provisions
of Schedule III to the Companies Act, 2013, where considered necessary), IFRSs in issue as at 31 December 2014 and
Ind ASs.
References to “Indian GAAP” are to the standards notified by the Central Government under the Companies
(Accounting Standards) Rules, 2006 (applicable to all companies) vide notification G.S.R.739(E) dated 7 December 2006,
as amended and to the relevant requirements of the Companies Act, 2013. IFRSs are Standards and Interpretations
adopted by the International Accounting Standards Board. They comprise the International Financial Reporting
Standards, International Accounting Standards, and Interpretations issued by the IFRS Interpretations Committee or the
former Standing Interpretations Committee. Ind ASs refers to the accounting standards as specified in the Annexure to
the Companies (Indian Accounting Standards) Rules, 2015.
The summary does not attempt to capture all of the differences that exist or that may be material to a particular entity’s
financial statements or all the provisions of Schedule III to the Companies Act, 2013 nor does it include differences
relating to pronouncements by other regulators such as RBI, Income tax authorities, etc. Our focus is on differences
that are commonly found in practice. Accordingly, we recommend that readers seek appropriate professional advice
regarding any specific issues that they encounter. This publication should not be relied on as a substitute for such advice.
The significance of these differences – and others not included in this list – will vary with respect to individual
entities depending on such factors as the nature of the entity’s operations, the industry in which it operates and the
accounting policy choices it has made. Reference to the underlying accounting standards and any relevant national
regulations is essential in understanding the specific differences.
Abbreviations used in this publication are as follows:
Comparison of Indian GAAP,
IFRS and Ind AS
AS Notified Indian Accounting Standard(s)
AOCI Accumulated other comprehensive income
EPS Earnings per share
FASB Financial Accounting Standards Board
FVTOCI Fair value through other comprehensive income
FVTPL Fair value through profit or loss
GAAP Generally accepted accounting principles
IAS International Accounting Standards
IASB International Accounting Standards Board
ICAI The Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
IFRIC International Financial Reporting Interpretations Committee (now renamed as IFRS
Interpretations Committee) and the Interpretations issued by that Committee
Ind AS Indian Accounting Standards converged with IFRS
MCA Ministry of Corporate Affairs
NBFC Non-banking financial company
OCI Other comprehensive income
RBI Reserve Bank of India
Schedule III Schedule III to the Companies Act, 2013
SIC Standing Interpretations Committee of the International Accounting Standards Committee and
the interpretations issued by that committee
SEBI Securities and Exchange Board of India

6
Comparison
Topic Indian GAAP IFRS Ind AS
Presentation of Financial
Statements – primary
literature
AS 1 – Disclosure of Accounting
Policies/Schedule III to the
Companies Act, 2013
AS 5 – Net Profit or Loss for the
Period, Prior Period Items and
Changes in Accounting Policies
Note: An exposure draft of
AS 1 (Revised), Presentation of
Financial Statements has been
issued by the ICAI. Pending
finalisation, the discussion
below is based on AS 1 as
notified under the Companies
(Accounting Standards) Rules,
2006.
IAS 1 – Presentation of Financial
Statements
Ind AS 1 – Presentation of
Financial Statements
Statements – components
of financial statements
The requirements for the presentation
of financial statements are set out in
Schedule III to the Companies Act,
2013, Schedule III to the Banking
Regulation Act, 1949 (for banks), the
regulations issued by the Insurance
Regulatory and Development
Authority (for insurance companies)
and the SEBI Guidelines for Mutual
Funds (for mutual funds) together
with the Accounting Standards
(Accounting Standards) Rules, 2006.
As per the Companies Act, 2013
‘financial statement’ in relation to a
company, includes (a) a balance sheet
as at the end of the financial year; (b)
a profit and loss account, or in the
case of a company carrying on any
activity not for profit, an income and
expenditure account for the financial
year; (c) cash flow statement for the
financial year; (d) a statement of
changes in equity, if applicable; and
(e) any explanatory note annexed to,
or forming part of, any document
referred to above.
A complete set of financial
statements under IFRS comprises
a) a statement of financial position;
b) a statement of profit or loss and
other comprehensive income;
c) a statement of changes in equity;
d) a statement of cash flows; and
e) notes comprising significant
accounting policies and other
explanatory information.
Comparative figures are presented
for one year. When a change
in accounting policy has been
applied retrospectively or items
of financial statements have been
restated/reclassified, a statement
of financial position is required as
at the beginning of the earliest
comparative period.
Additional comparative information
may be presented, if it is in
accordance with IFRS, but it need
not comprise a complete set of
financial statements.
A complete set of financial
statements under Ind AS comprises
a) a balance sheet as at the end of
the period; b) statement of profit
and loss; c) statement of changes
in equity; d) a statement of cash
flows; e) notes including summary
of accounting policies and other
explanatory information.
Comparative figures are presented
for one year. When a change in
accounting policy has been applied
retrospectively or items of financial
statements have been restated/
reclassified, a balance sheet is
required as at the beginning of the
earliest period presented.
Similar to IFRS.

Statements – components
of financial statements
(continued)
Comparative (corresponding) figures
are presented for one year as per the
requirements of Schedule III.
Separate financial statements are
required to be presented by all
entities. The Companies Act 2013
requires a company having one
or more subsidiaries, to prepare a
consolidated financial statement
of the company and of all the
subsidiaries in the same form and
manner as that of its own. The term
‘subsidiary’ includes an associate
company and joint venture. Certain
relaxations have been provided from
the preparation of consolidated
financial statements. Please refer
to the topic 'Consolidated Financial
Statements – scope' for the
relaxations provided.
Equity listed companies are required
to present consolidated financial
statements in addition to separate
financial statements of the parent in
terms of the Listing Agreement with
the Stock Exchanges and the SEBI
Guidelines.

8
Statements – formats
Schedule III prescribes the minimum
requirements for disclosure on
the face of the balance sheet and
statement of profit and loss and
notes.
AS 3 provides guidance on line items
to be presented in the statement of
cash flows.
Specifies the line items to be
presented in the statement of
financial position, statement of profit
or loss and other comprehensive
income and statement of changes
in equity.
Recent amendments provide
guidance for identifying additional
line items and sub-totals, clarify
aggregation or disaggregation
of line-items, clarify method of
presentation of other comprehensive
income of equity-accounted
associates and joint ventures, clarify
that materiality considerations apply
to all parts of financial statements
including disclosures and provide
additional examples of possible
ways of ordering notes and remove
some unhelpful examples of
significant accounting policies. This
amendment is effective for annual
periods beginning on or after 1
January 2016 with early adoption
permitted.
IAS 7 provides guidance on line
items to be presented in the
statement of cash flows.
Ind AS 1 does not include
any illustrative format for
the presentation of financial
statements. The ICAI has issued
an exposure draft of the Ind
AS-compliant Schedule III.
The recent amendments to IAS 1
'Disclosure Initiatives' are yet to be
made to Ind AS 1.
Ind AS 7 provides guidance on
line items to be presented in the
statement of cash flows.

Statements – definition of
“material” and disclosure of
material information
Financial statements should disclose
all “material” items, i.e. items, the
knowledge of which might influence
the decisions of the user of the
Omissions or misstatements are
material if individually or collectively
they could influence the economic
decisions that users take on the
basis of financial statements.
Recent amendments to IAS 1
clarify that an entity should not
reduce the understandability of its
financial statements by obscuring
material information with immaterial
information or by aggregating
material items that have different
natures or functions. Where some
IFRSs specify minimum information
that is required to be included in
the financial statements including
the notes, such a specific disclosure
is not required to be provided if
the information resulting from that
disclosure is not material.
While the definition of material
is similar to that under IFRS, the
recent amendments to IAS 1
'Disclosure Initiatives' are yet to be
incorporated in Ind AS 1. Under
Ind AS 1, a specific disclosure
required by an Ind AS is not
provided if the information is not
material except when required by
law.
Statements – fair
presentation
Fair presentation requires compliance
with the applicable requirements of
the Companies Act, 2013 and the
other regulatory requirements and
the application of the qualitative
characteristics of the Accounting
Standards Framework.
Departures from Accounting
Standards or Companies Act, 2013
are prohibited unless permitted
by other regulatory framework for
example, the Insurance Regulatory
and Development Authority.
Fair presentation requires faithful
representation of the effects of
the transactions, other events and
conditions in accordance with the
definitions of and recognition criteria
for assets, liabilities, income and
expenses set out in the Framework.
In extremely rare circumstances
in which management concludes
that compliance with requirements
of a Standard or Interpretation is
so misleading, it may depart from
the Standard or the Interpretation.
Reasons for departure and why
application of the Standard or
the Interpretation would have
been misleading and the financial
impact of applying the standard are
required to be disclosed.
Similar to IFRS.

10
Statements – classification
of financial liabilities under
refinancing arrangements
There is no guidance in the existing
standards. Schedule III specifies that
financial liabilities where the company
does not have an unconditional right
to defer settlement of the liability for
at least 12 months after the reporting
date will be classified as current
liabilities.
Current, even if the agreement to
refinance or reschedule payments on
a long-term basis is completed after
the end of the reporting period and
before the financial statements are
authorised for issue.
Similar to IFRS.
Statements – classification
of financial liabilities upon
breach of covenants
There is no guidance in the existing
standards. Schedule III specifies that
financial liabilities where the company
does not have an unconditional right
to defer settlement of the liability for
at least 12 months after the reporting
date will be classified as current
liabilities.
The Guidance Note on Revised
Schedule VI to the Companies Act,
1956 (Schedule VI has now been
superseded by Schedule III under
the Companies Act, 2013) issued by
the ICAI states that “In the Indian
context, the criteria of a loan becoming
repayable on demand on breach of
a covenant, is generally added in the
terms and conditions as a matter
of abundant caution. Also, banks
generally do not demand repayment
of loans on such minor defaults of
debt covenants. Therefore, in such
situations, the companies generally
continue to repay the loan as per
its original terms and conditions.
Hence, considering that the practical
implications of such minor breach
are negligible in the Indian scenario,
an entity could continue to classify
the loan as “non-current” as on the
Balance Sheet date since the loan is
not actually demanded by the bank at
any time prior to the date on which the
Financial Statements are approved.”
When an entity breaches a provision
of a long-term loan arrangement
on or before the end of the
reporting period with the effect that
the liability becomes payable on
demand, it classifies the liability as
current, even if the lender agreed,
after the reporting period and
before the authorisation of the
financial statements for issue, not to
demand payment as a consequence
of the breach.
However the liability can be
classified as non-current if the lender
has agreed before the end of the
reporting period to provide a grace
period of minimum 12 months after
the reporting period within which
the breach can be rectified and the
lender cannot demand immediate
repayment.
Where there is a breach of a
material provision of a long-term
arrangement on or before the
end of the reporting period
with the effect that the liability
becomes payable on demand on
the reporting date, if the lender
has agreed, after the reporting
period and before the approval
of the financial statements for
issue, not to demand payment
as a consequence of the breach,
the loan will not be classified as
current.

Presentation of
Financial Statements –
presentation of income
statement/statement of
comprehensive income
Schedule III requires an analysis of
expense by nature. Any item of income
or expenditure which exceeds one per
cent of the revenue from operations or
Rs.100,000, whichever is higher, needs
to be disclosed.
An analysis of expenses is presented
using a classification based on
either the nature of expenses or
their function whichever provides
information that is reliable and more
relevant. If presented by function,
specific disclosures by nature are
provided in the notes. When items
of income or expense are material,
their nature and amount are
separately disclosed.
Entities should present an analysis
of expenses recognised in profit
or loss using a classification based
only on the nature of expense.
Statements – presentation
of profit or loss attributable
to non-controlling interests
(minority interests)
Profit or loss attributable to minority
interests is disclosed as deduction from
the profit or loss for the period as an
item of income or expense (as per
AS 21).
Profit or loss attributable to
non-controlling interests and equity
holders of the parent are disclosed
in the statement of profit or loss
and other comprehensive income
as allocations of profit or loss and
total comprehensive income for the
period.
Similar to IFRS.
Statements – statement
of profit or loss and other
comprehensive
income (statement of
comprehensive income)
Statement of profit and loss is the
Indian GAAP equivalent of separate
statement of profit or loss under IFRS.
Some items such as revaluation
surplus which are treated as ‘other
comprehensive income’ under IFRS/
Ind AS are recognised directly in equity
under Indian GAAP.
The statement of profit or loss
and other comprehensive income
includes all items of income and
expense – (i.e. all ‘non-owner’
changes in equity) including (a)
components of profit or loss and
(b) other comprehensive income
(i.e. items of income and expense
that are not recognised in profit
or loss as required or permitted by
other IFRSs). These items may be
presented either:
• in a single statement of profit or
loss and other comprehensive
income (in which there is a
sub-total for profit or loss); or
• in a separate statement of profit
or loss (displaying components
of profit or loss) and a
statement of profit or loss and
other comprehensive income
(beginning with profit or loss and
displaying components of other
comprehensive income).
An entity is required to present
all items of income and expense
including components of other
comprehensive income in a period
in a single statement of profit and
loss.

12
Statements – statement of
changes in equity
A statement of changes in equity is
currently not presented.
Movements in share capital, retained
earnings and other reserves are to be
presented in the notes to accounts.
The statement of changes in equity
includes the following information:
• total comprehensive income for
the period;
• the effects on each component of
equity of retrospective application
or retrospective restatement in
accordance with IAS 8; and
• for each component of equity,
a reconciliation between the
opening and closing balances,
separately disclosing each
change.
Similar to IFRS.
Statements – extraordinary
items
Extraordinary items are disclosed
separately in the statement of profit
and loss and are included in the
determination of net profit or loss for
the period.
Items of income or expense to be
disclosed as extraordinary should be
distinct from the ordinary activities
and are determined by the nature of
the event or transaction in relation to
the business ordinarily carried out by
an entity.
Presentation of any items of income
or expense as extraordinary is
prohibited.
Similar to IFRS.
Statements – reclassification
A disclosure is made in financial
statements that comparative amounts
have been reclassified to conform to
the presentation in the current period
without additional disclosures for
the nature, amount and reason for
reclassification.
When comparative amounts are
reclassified, nature, amount and
reason for reclassification are
disclosed.
Similar to IFRS.
Statements – critical
judgements
AS 1 does not specifically require
disclosure of judgements that
management has made in the
summary of significant accounting
policies or other notes.
Requires disclosure of critical
judgements made by management
in applying accounting policies.
Similar to IFRS.

Statements – estimation
uncertainty
AS 1 does not specifically require an
entity to disclose information about
the assumptions that it makes about
the future and other major sources
of estimation uncertainty at the
end of the reporting period though
other standards may require certain
disclosures of the same.
Requires disclosure of key sources
of estimation uncertainty at the end
of the reporting period, that have a
significant risk of causing a material
adjustment to the carrying amounts
of assets and liabilities within the next
financial year.
The nature of the uncertainty and the
carrying amounts of such assets and
liabilities at the end of the reporting
period are required to be disclosed.
Similar to IFRS.
Statements – capital
AS 1 does not require an entity to
disclose information that enables
users of its financial statements
to evaluate the entity’s objectives,
policies and processes of managing
capital.
Requires disclosure of information
about management of capital and
compliance with externally imposed
capital requirements, if any.
Similar to IFRS.

14
Inventories – primary
literature
AS 2 – Valuation of Inventories IAS 2 – Inventories Ind AS 2 – Inventories
Inventories – scope There is no scope exemption in
AS 2 for any inventories held by
commodity traders. Further, AS 2
totally excludes from its scope (and
not just measurement requirements)
producers’ inventories of livestock,
agricultural and forest products, and
mineral oils, ores and gases to the
extent that they are measured at net
realisable value in accordance with
well-established practices in those
industries.
Work in progress arising under
construction contracts, including
directly related service contracts
and work in progress arising in the
ordinary course of business of service
providers have been scoped out of
AS 2.
Measurement requirements of
IAS 2 do not apply to inventories
held by commodity broker-traders
who measure their inventories at fair
value less costs to sell and producers
of agricultural and forest products,
agricultural produce after harvest
and minerals and mineral products
to the extent that they are measured
at net realisable value in accordance
with well-established practices in
those industries.
The standard also scopes out
the biological assets related to
agricultural activity and agricultural
produce at the point of harvest
Changes in fair value less costs to
sell/changes in net realisable value
are recognised in profit or loss in the
period of the change.
Similar to IFRS.
Inventories – deferred
settlement terms
Inventories purchased on deferred
settlement terms are not explicitly
dealt with in the accounting standard
on inventories.
The cost of inventories generally will
be the purchase price for deferred
credit terms unless the contract states
the interest payable for deferred
terms.
Difference between the purchase
price of inventories for normal
credit terms and the amount paid
for deferred settlement terms is
recognised as interest expense.
Similar to IFRS.
Inventories – cost formula It is not expressly mandated to use
the same cost formula consistently
for all inventories that have a similar
nature and use to the entity. The
formula used should reflect the fairest
possible approximation to the cost
incurred in bringing the items of
inventory to their present location
and condition.
Requires an entity to use the same
cost formula for all inventories
having a similar nature and use to
the entity. For inventories with a
different nature or use, different
cost formulas may be justified.
Similar to IFRS.

Inventories – reversal of
write-down of inventory
No specific guidance in AS 2 for
reversal of write-down of inventories.
However, reversals may be permitted
as AS 5, Net Profit or Loss for the
requires this to be disclosed as a
separate line item in the statement of
profit and loss.
Write-down of inventory is reversed
if circumstances that previously
caused inventories to be written
down below cost no longer exist or
when there is clear evidence of an
increase in the net realisable value
because of changes in economic
circumstances.
The amount of reversal is limited
to the amount of the original
write-down.
Similar to IFRS.
Inventories – classification As per the requirements of Schedule
III, inventories need to be classified as:
• Raw materials;
• Work-in-progress;
• Finished goods;
• Stock-in-trade (in respect of goods
acquired for trading);
• Stores and spares;
• Loose tools;
• Others.
No specific classification
requirements – classification should
be appropriate to the entity.
Similar to IFRS.

16
Statement of Cash
Flows – primary
literature
AS 3 – Cash Flow Statements IAS 7 – Statement of Cash Flows Ind AS 7 – Statement of Cash
Flows
Statement of Cash Flows –
bank overdrafts
Bank overdrafts are considered as
financing activities.
Included as cash and cash
equivalents if they form an
integral part of an entity’s cash
management.
Similar to IFRS.
Statement of Cash
Flows – cash flows from
extraordinary items
Cash flows from items disclosed
as extraordinary are classified as
arising from operating, investing or
financing activities as appropriate,
and separately disclosed.
As presentation of items as
extraordinary is not permitted,
the cash flow statement does not
reflect any items of cash flow as
extraordinary.
Similar to IFRS.
interest and dividend
For Financial enterprises:
Interest paid and interest and
dividend received are to be classified
as operating activities.
Dividend paid is to be classified as
financing activity.
For other enterprises:
Interest and dividends received are
required to be classified as investing
activities. Interest and dividends
paid are required to be classified as
financing activities.
May be classified as operating,
investing or financing activities in a
manner consistent from period to
period.
Similar to Indian GAAP.
acquisition and disposal of
properties held for rental to
others
No specific guidance. Entities might routinely sell items
of property, plant and equipment
that they have previously held for
rental to others. Cash payments/
receipts in respect of acquisition/
disposal of such assets are classified
as operating activities.
Similar to IFRS.
Statement of Cash Flows
– changes in ownership
interest
No specific guidance. Changes in ownership interest in a
subsidiary without loss of control are
treated as financing activities.
Similar to IFRS.

Accounting Policies,
Changes in Accounting
Estimates and Errors –
primary literature
AS 5 – Net Profit or Loss for the
AS 5 (Revised), Accounting
Policies, Changes in Accounting
Estimates and Errors has been
issued by the ICAI. Pending
2006.
IAS 8 – Accounting Policies,
Estimates and Errors
Ind AS 8 – Accounting Policies,
Estimates and Errors –
changes in accounting
policies
Changes in accounting policies
should be made only if it is required
by statute, for compliance with an
Accounting Standard or for a more
appropriate presentation of the
financial statements on a prospective
basis (unless transitional provisions,
if any, of an accounting standard
require otherwise) together with a
disclosure of the impact of the same,
if material.
If a change in the accounting policy
has no material effect on the financial
statements for the current period, but
is expected to have a material effect
in the later periods, the same should
be appropriately disclosed.
However, change in depreciation
method, though considered a change in
accounting policy, is given retrospective
effect. (See discussion on Property, Plant
and Equipment below).
Requires retrospective application
of changes in accounting policies
by adjusting the opening balance
of each affected component
of equity for the earliest prior
period presented and the other
comparative amounts for each
period presented as if the new
accounting policy had always been
applied, unless transitional provisions
of an accounting standard require
otherwise.
Similar to IFRS.
– errors
Prior period items are included
in determination of net profit or
loss of the period in which the
error pertaining to a prior period
is discovered and are separately
disclosed in the statement of profit
and loss in a manner that the impact
on current profit or loss can be
perceived.
Material prior period errors are
corrected retrospectively by restating
the comparative amounts for prior
periods presented in which the error
occurred or if the error occurred
before the earliest period presented,
by restating the opening statement
of financial position.
Similar to IFRS.

18
– new accounting
pronouncements
Not required to be disclosed. Non-application of new accounting
pronouncements that have been
issued but are not yet effective as
at the end of the reporting period
is disclosed. In such a case, known
or reasonably estimable information
relevant to assessing the possible
impact that application of the new
accounting pronouncements will
have on the financial statements on
initial application is also disclosed.
Similar to IFRS.
– absence of standard
or interpretation that
specifically applies to a
transaction
No specific guidance. Permits considering recent
pronouncements by other standard-
setting bodies that use a similar
conceptual framework to IFRS to the
extent these pronouncements do
not conflict with IFRS.
In the absence of an Ind AS that
specifically applies to a transaction,
other event or condition, the
management, while using
judgment in developing and
applying an accounting policy,
should first consider the most
recent pronouncements of the
IASB and in absence thereof
those of the other standard
setting bodies that use a similar
conceptual framework to develop
accounting standards.

Events after the
Reporting Period –
primary literature
AS 4 – Contingencies and Events
Occurring after the Balance
Sheet Date
Note: An exposure draft of AS
4 (Revised) Events Occurring
After the Balance Sheet Date has
been issued by the ICAI. Pending
2006.
IAS 10 – Events After the
Reporting Period
Ind AS 10 – Events After the
Reporting Period
Events after the Reporting
Period – dividends
Schedule III requires disclosure of
proposed dividend in the notes
to accounts. However, as per the
requirements of AS 4 which override
the provisions of Schedule III, dividends
stated to be in respect of the period
covered by the financial statements,
which are proposed or declared after
the balance sheet date but before
approval of the financial statements will
have to be recorded as a provision.
Liability for dividends declared to
holders of equity instruments are
recognised in the period when
declared. It is a non-adjusting event.
Similar to IFRS.
Events after the Reporting
Period – adjusting event
No specific guidance. When an entity breaches a provision
of a long-term loan arrangement
on or before the end of the
reporting period with the effect
that the liability becomes payable
on demand, an agreement by the
lender after the reporting period
and before the authorisation of the
financial statements for issue not to
demand payment is not considered
as an adjusting event.
Where there is a breach of a
long-term loan arrangement
before the end of the reporting
period whereby the liability
becomes payable on demand on
the reporting date, the agreement
by lender before the approval of
the financial statements for issue
not to demand payment as a
consequence of the breach, will be
considered as an adjusting event.

20
Income Taxes – primary
literature
AS 22 – Accounting for Taxes
on Income
IAS 12 – Income Taxes
SIC 25 – Income Taxes –
Changes in the Tax Status of an
Entity or its Shareholders
Ind AS 12 – Income Taxes
Ind AS 12 – Appendix A –
Income Taxes – Changes in the
Tax Status of an Entity or its
Shareholders
Income Taxes – deferred
income taxes
Deferred taxes are computed for
timing differences in respect of
recognition of items of profit or
loss for the purposes of financial
reporting and for income taxes.
Deferred taxes are computed for
temporary differences between
the carrying amount of an asset or
liability in the statement of financial
position and its tax base.
Similar to IFRS.
Income Taxes – recognition
of deferred tax assets and
liabilities
Deferred taxes are generally
recognised for all timing differences.
Deferred income taxes are
recognised for all temporary
differences between accounting
and tax base of assets and liabilities
except to the extent which arise
from a) initial recognition of
goodwill or b) asset or liability in a
transaction which i) is not a business
combination; and ii) at the time of
the transaction, affects neither the
accounting nor the tax profit.
Similar to IFRS.
of taxes on items
recognised in other
comprehensive income or
directly in equity
No specific guidance in AS 22.
However, an announcement made
by the ICAI requires any expense
charged directly to reserves and/
or securities premium account to
be net of tax benefits expected to
arise from the admissibility of such
expenses for tax purposes. Similarly,
any income credited directly to a
reserve account or a similar account
should be net of its tax effect.
Current tax and deferred tax are
recognised outside profit or loss
if the tax relates to items that are
recognised in the same or a different
period, outside profit or loss.
Therefore, the tax on items
recognised in other comprehensive
income or directly in equity, is also
recorded in other comprehensive
income or in equity, as appropriate.
Similar to IFRS.
of deferred tax assets for
unused tax losses etc.
Deferred tax asset for unused tax
losses and unabsorbed depreciation
is recognised only to the extent that
there is virtual certainty supported by
convincing evidence that sufficient
future taxable income will be available
against which such deferred tax assets
can be realised. Deferred tax asset
for all other unused credits/timing
differences is recognised only to the
extent that there is a reasonable
certainty that sufficient future taxable
income will be available against
which such deferred tax assets can be
realised.
Deferred tax asset is recognised for
carry forward unused tax losses and
unused tax credits to the extent that
it is probable that future taxable
profit will be available against
which the deferred tax asset can
be utilised. Where an entity has
a history of tax losses, the entity
recognises a deferred tax asset
only to the extent that the entity
has sufficient taxable temporary
differences or there is convincing
other evidence that sufficient
taxable profit will be available.
Similar to IFRS.

Income Taxes – investments
in subsidiaries, branches,
and associates and interests
in joint arrangements
No deferred tax liability is
recognised. Deferred tax expense
is an aggregation from separate
financial statements of each group
entity and no adjustment is made on
consolidation.
Deferred tax liability for all
taxable temporary differences are
recognised except to the extent:
• the parent, the investor, the
venturer or joint operator is able
to control timing of the reversal
of the temporary difference, and
• it is probable that the temporary
difference will not reverse in the
foreseeable future.
Similar to IFRS.
Income Taxes – deferred
tax in respect of business
combinations
No specific guidance. If the potential benefit of the
acquiree’s income tax loss carry
forwards or other deferred tax
assets did not satisfy the criteria
in IFRS 3 for separate recognition
when the business combination
was initially accounted but if such
benefit is subsequently recognised,
goodwill is reduced to record
pre-acquisition deferred tax assets
which are recognised within 12
months of the acquisition date as a
result of new information on facts
and circumstances that existed on
the acquisition date. If the carrying
amount of goodwill is zero, any
remaining deferred tax benefit is
recognised in profit or loss. All other
deferred tax benefits are recognised
in profit or loss (or if IAS 12 so
requires, outside profit or loss).
Similar to IFRS, except that if the
carrying amount of goodwill is
zero, any remaining deferred
tax benefits are recognised in
other comprehensive income and
accumulated in equity as capital
reserve or recognised directly
in capital reserve depending
on whether there exists clear
evidence of the underlying
reasons for classifying the business
combination as a bargain purchase
as specified in Ind AS 103 – Business
Combinations.
Income Taxes – deferred tax
on unrealised intra-group
profits
Deferred tax is not recognised.
Deferred tax expense is an
aggregation from separate financial
statements of each group entity
and no adjustment is made on
consolidation.
Deferred tax on unrealised intra-
group profits is recognised at the
buyer’s rate.
Similar to IFRS.
Income Taxes –
classification of deferred tax
assets and liabilities
Schedule III requires net deferred
tax assets and net deferred tax
liabilities to be presented as part of
non-current assets and non-current
liabilities respectively.
A limited revision to AS 22 has been
proposed by the ICAI to bring the
presentation requirements specified
in AS 22 in line with that in
Schedule III.
Always classified as non-current,
if current and non-current
classification is presented.
Similar to IFRS.

22
Income Taxes – disclosure Certain additional disclosures like
rate reconciliation, tax holidays
and their expiry and unrecognised
deferred tax liability on undistributed
earnings of subsidiaries, branches,
associates and joint ventures are not
required.
Additional disclosures required
under IFRS include:
• A reconciliation between the
income tax expense (income)
reported and the product of
accounting profit multiplied by
the applicable tax rate. Either a
numerical reconciliation or tax
rate reconciliation is required to
be presented.
• Details of tax holidays and expiry.
• Unrecognised deferred tax liability
on undistributed earnings of
subsidiaries, branches, associates
and joint ventures.
Similar to IFRS.
Income Taxes – tax benefits
related to share-based
payments
No specific guidance. Deferred tax benefit is calculated
based on tax deduction for the share
based payment under the applicable
tax law (for example intrinsic value).
Similar to IFRS.
Income Taxes – recovery of
revalued non-depreciable
assets
Revaluation is treated as a
permanent difference under Indian
GAAP and, hence, the question of
recognising deferred tax effects of
the same does not arise at all.
Measurement of deferred tax liability
or asset arising from revaluation is
based on the tax consequences from
the sale of asset rather than through
use.
Similar to IFRS.
Income Taxes – recovery
of investment property
measured under fair value
model
Not applicable as investment
property cannot be measured using
the fair value model.
In the case of investment property
measured using fair value model,
for measuring deferred taxes, there
is a rebuttable presumption that the
carrying amount will be recovered
through sale.
Similar to Indian GAAP.
Deferred taxes –
recognition on foreign
currency denominated
non-monetary assets/
liabilities when the tax
reporting currency is not
the functional currency
Not applicable as there is no
concept of functional currency.
The non-monetary assets and
liabilities of an entity are measured
in its functional currency. If the
entity's taxable profit or tax loss
(and, hence, the tax base of its
non-monetary assets and liabilities)
is determined in a different currency,
changes in the exchange rate give
rise to temporary differences that
result in a recognised deferred tax
liability or asset.
Similar to IFRS.

Changes in Tax Status of an
Entity or its Shareholders
No specific guidance. Current and deferred tax
consequences are included in the
profit or loss of the period of change
unless the consequences relate to
transactions or events recognised
outside profit or loss either in other
comprehensive income or directly
in equity in the same or a different
period.
Similar to IFRS.

24
Property, Plant and
Equipment – primary
literature
AS 6 – Depreciation Accounting
AS 10 – Accounting for Fixed
Assets
AS 10 (Revised), Property, Plant
and Equipment has been issued
by the ICAI. The discussion
2006.
IAS 16 – Property, Plant and
Equipment
IFRIC 1 – Changes in Existing
Decommissioning, Restoration
and Similar Liabilities
IFRIC 20 – Stripping Costs in the
Production Phase of a Surface
Mine
Ind AS 16 – Property, Plant and
Equipment
Changes in Existing
Decommissioning, Restoration
and Similar Liabilities
Ind AS 16 – Appendix B –
Stripping Costs in the
Production Phase of a Surface
Mine
Property, Plant and
Equipment – scope
There is no exemption in AS 10 for
property under development for
future use as investment property.
Property under construction or
development for future use as
investment property is excluded
from the scope of IAS 16 and
is within the scope of IAS 40,
Investment Property.
Biological assets that meet the
definition of a bearer plant i.e.
a living plant that is used in the
production or supply of agricultural
produce, is expected to bear
produce for more than one period
and which will not be sold as
agricultural produce are included
in property, plant and equipment
(effective from 1 January 2016 with
earlier application permitted).
Similar to IFRS.
Property, plant and
equipment – major spare
parts
Machinery spares are usually
charged to the profit and loss
statement as and when consumed.
However, if such spares can be
used only in connection with an
item of fixed asset and their use is
expected to be irregular, it may be
appropriate to allocate the total cost
on a systematic basis over a period
not exceeding the useful life of the
principal item.
Spare parts are recognised in
accordance with IAS 16 when they
meet the definition of property,
plant and equipment. Otherwise,
such items are classified as inventory.
Similar to IFRS.
Property, Plant and
Equipment – estimated
costs of dismantling,
removing or restoring items
of property, plant and
equipment
No such specific requirement. The initial estimate of the costs of
dismantling and removing the item
and restoring the site on which it is
located is required to be included
in the cost of the respective item of
property plant and equipment.
Similar to IFRS.

Property, Plant and
Equipment – replacement
costs
Replacement cost of an item of
property, plant and equipment is
generally expensed when incurred.
Only expenditure that increases
the future benefits from the
existing asset beyond its previously
assessed standard of performance is
capitalised.
From financial years commencing on
or after 1 April 2015,
Schedule II mandates fixed assets to
be componentised and therefore,
the position will be similar to that
under IFRS.
Replacement cost of an item of
property, plant and equipment is
capitalised if replacement meets the
recognition criteria. Carrying amount
of items replaced is derecognised.
Similar to IFRS.
Property, Plant and
Equipment – cost of major
inspections
Costs of major inspections are
generally expensed when incurred.
Cost of major inspections is
recognised in the carrying amount
of property, plant and equipment as
a replacement, if recognition criteria
are satisfied and any remaining
carrying amount of the cost of
previous inspection is derecognised.
Similar to IFRS.
Property, Plant and
Equipment – revaluation
No specific requirement on
frequency of revaluation.
If an entity adopts the revaluation
model, revaluations are required to
be made with sufficient regularity
to ensure that the carrying amount
does not differ materially from that
which would be determined using
fair value at the end of the reporting
period.
Similar to IFRS.
Property, Plant and
Equipment – depreciation
AS10 does are not require assets to
be componentised and depreciated
separately, although it states that
such an approach may improve
the accounting for an item of fixed
asset.
Property, plant and equipment are
componentised and are depreciated
separately. There is no concept of
minimum statutory depreciation
under IFRS.
Similar to IFRS.

26
Property, Plant and
Equipment – depreciation
(continued)
Schedule II to the Companies
Act, 2013 sets out the useful lives
based on the nature of assets
and the useful life should not
ordinarily be different from the
life specified in the Schedule.
However, a different useful life
may be used if such difference
is disclosed and a justification,
backed by technical advice, is
provided in this behalf. Schedule
II also mandates fixed assets to be
componentised for depreciation
purposes (componentisation is
mandatory in respect of financial
years commencing on or after 1
April 2015).
Property, Plant and
Equipment – compensation
for impairment
No specific requirement. In practice,
compensation is offset against
replaced items of property, plant
and equipment.
Compensation from third parties
for impairment or loss of items of
property, plant and equipment are
included in profit or loss when the
compensation becomes receivable.
Similar to IFRS.
Property, Plant and
Equipment – transfers from
revaluation reserve
The Companies Act, 2013 precludes
transfers from the revaluation
reserve to the statement of profit
and loss.
Transfers from revaluation reserve to
retained earnings are made directly
and not through profit or loss.
Similar to IFRS.
Property, Plant and
Equipment – residual value
Estimates of residual value are not
required to be updated.
Estimates of residual value need to
be reviewed at least at each year
end.
Similar to IFRS.
Property, Plant and
Equipment – reassessment
of useful life and
depreciation method
Not specifically stated. Requires annual reassessment of
useful life and depreciation method.
Similar to IFRS.
Property, Plant and
Equipment – acceptable
methods of depreciation
Depreciation methods include
the straight-line method, the
diminishing balance method and the
units of production method.
A variety of depreciation methods
can be used to allocate based on a
systematic basis over its useful life.
These methods include the straight-
line method, the diminishing
balance method and the units of
production method. Depreciation
method that is based on revenue is
not appropriate (effective for annual
reporting periods beginning on or
after 1 January 2016).
Similar to IFRS.

Property, Plant and
Equipment – change in
method of depreciation
Requires retrospective
re-computation of depreciation
and any excess or deficit on such
re-computation is required to be
adjusted in the period in which such
change is effected.
Such a change is treated as a
change in accounting policy and its
effect is quantified and disclosed.
Changes in depreciation method are
considered as change in accounting
estimate and applied prospectively.
Similar to IFRS.
Property, Plant and
Equipment – presentation
of capital advances
Schedule III requires capital advances
to be presented separately under
the head ‘Long-term loans and
advances’, as part of non-current
assets.
No specific guidance though usually
included in capital-work-in-progress.
Similar to IFRS.
Property, Plant and
Equipment – routine sale of
some properties
No specific guidance. Entities might routinely sell items
of property, plant and equipment
that they have previously held for
rental to others. The proceeds from
the sale of such assets should be
recognised as revenue in accordance
with IAS 18/IFRS 15 (for annual
period beginning 1 January 2017).
Similar to IFRS.
Changes in Existing
Decommissioning,
Restoration and Similar
Liabilities
No specific guidance. Provisions for decommissioning,
restoration and similar liabilities that
have previously been recognised
as part of the cost of an item of
property, plant and equipment are
adjusted for changes in the amount
or timing of future costs and for
changes in market-based discount
rates.
Similar to IFRS.
Stripping Costs in the
Production phase of a
surface mine
No specific guidance IFRIC 21 applies to waste removal
costs that are incurred in surface
mining activity during the
production phase of the mine
(‘production stripping costs’).
It addresses recognition of
production stripping costs as an
asset and measurement (initial and
subsequent) of that stripping activity
asset.
Similar to IFRS.

28
Leases – primary
literature
AS 19 – Leases IAS 17 – Leases
(The IASB is currently working
on a revised standard on Leases
which is proposed to be issued
in the latter of the year 2015)
IFRIC 4 – Determining Whether
an Arrangement Contains a
Lease
SIC 15 – Operating Leases
– Incentives
SIC 27 – Evaluating the
Substance of Transactions
Involving the Legal Form of a
Lease
Ind AS 17 – Leases
Ind AS 17– Appendix A –
Operating Leases Incentives
Ind AS 17 – Appendix B –
Evaluating the Substance of
Transactions Involving the Legal
Form of a Lease
Ind AS 17 – Appendix C –
Determining Whether an
Arrangement Contains a Lease
Leases – interest in
leasehold land
Leasehold land is recorded and
classified as fixed assets.
Recognised as operating lease or
finance lease as per definition and
classification criteria. An important
consideration in such determination
is that land has an indefinite
economic life. A property interest in
an operating lease may be classified
as investment property in which
case it should be accounted for as
a finance lease and the fair value
model should be applied for the
asset recognised.
Similar to IFRS except that a property
interest in an operating lease cannot
be accounted for as investment
property as the fair value model is
not permissible by Ind AS 40.
Leases – operating lease
rentals – recognition
Lease payments under an operating
lease should be recognised as
an expense in the statement of
profit and loss on a straight-line
basis over the lease term unless
another systematic basis is more
representative of the time pattern of
the user’s benefit.
Lease income from operating
leases should be recognised in the
statement of profit and loss on a
straight-line basis over the lease
term, unless another systematic
basis is more representative of
the time pattern in which benefit
derived from the use of the leased
asset is diminished.
Similar to Indian GAAP. Ind AS 17 contains a carve out
for escalation of operating lease
rentals that are in line with the
expected general inflation. Since
these are essentially to compensate
the lessor for expected inflationary
cost increases, these should not be
straight-lined by the lessor as well as
the lessee.

Leases – initial direct costs
of lessors for assets under a
finance lease
Initial direct costs are either
recognised immediately in the
statement of profit and loss or
allocated against the finance income
over the lease term.
Initial lease costs incurred by
manufacturer or dealer lessors
are recognised as expense at the
inception of the lease.
For finance leases other than those
involving manufacturer or dealer
lessors, initial direct costs are
included in the measurement of the
finance lease receivable and reduce
the amount of income recognised
Initial lease costs incurred by
manufacturer or dealer lessors
are recognised as expense when
selling profit is recognised, which is
normally at the commencement of
the lease term.
Similar to IFRS.
Leases – initial direct costs
of lessors for assets under
operating leases
Initial direct costs incurred by lessors
are either deferred and allocated
to income over the lease term in
proportion to the recognition of
lease income, or are recognised
as an expense in the statement of
profit and loss in the period in which
they are incurred.
Initial direct costs incurred by lessors
are added to the carrying amount of
the leased asset and recognised as
an expense over the lease term on
the same basis as lease income.
Similar to IFRS.
Determining whether an
arrangement contains a
lease
No specific guidance. Payments
under such arrangements are
recognised in accordance with the
nature of expense incurred.
Arrangements that do not take the
legal form of a lease but fulfilment
of which is dependent on the use of
specific assets and which convey the
right to use the assets are accounted
for as lease.
Similar to IFRS.
Operating Leases
– incentives
No specific guidance. Lease incentives (such as rent-free
period) for operating leases are
recognised by both the lessor and
the lessee as a reduction of rental
income and expense, respectively,
These are recognised on a straight-
line basis unless another systematic
basis is more representative of the
time pattern over which the benefit
of the leased asset is diminished
for the lessor/time pattern of the
lessee’s benefit from the use of the
leased asset (for the lessee).
Similar to IFRS.

30
Evaluating the Substance of
Transactions Involving the
Legal Form of a Lease
No specific guidance. If a series of transactions involves
the legal form of a lease and
the economic effect can only be
understood with reference to
the series as a whole, then the
series is accounted for as a single
transaction.
Similar to IFRS.

Employee Benefits –
primary literature
AS 15 (Revised 2005) –
Employee Benefits
IAS 19 – Employee Benefits
(2011)
IFRIC 14 – The Limit on a
Defined Benefit Asset, Minimum
Funding Requirements and their
Interaction
Ind AS 19 – Employee Benefits
Ind AS 19 – Appendix B – The
Limit on a Defined Benefit
Asset, Minimum Funding
Requirements and their
Interaction
Employee benefits – short-
term and other long-term
employee benefits
The distinction between short-term
and other long-term employee
benefits depends on whether they
fall wholly due within 12 months
after the end of the period in which
the employees render the related
service.
There is an inconsistency in the
definition of short-term employee
benefits and the current/non-current
classification in Schedule III.
While the definition of short-
term employee benefits as per
AS 15 refers to benefits “which
fall due wholly within 12 months
after the end of the period in
which the employees render the
related service”, as per Schedule III
requirements, for classification as
current liabilities, the benefits should
be “due to be settled within 12
months after the reporting date”.
However, the Guidance Note to
the Revised Schedule VI to the
Companies Act, 1956 (Schedule
VI has been superseded by
Schedule III under the Companies
Act, 2013), issued by ICAI, has
clarified that while AS 15 governs
the measurement requirements,
Schedule VI (now Schedule
III) governs the presentation
requirements. Therefore, each
company will need to apply these
criteria to its facts and circumstances
and decide an appropriate
classification of its employee benefit
obligations.
The distinction between short-term
and other long-term employee
benefits depends on whether
those benefits are expected to
be settled wholly before twelve
months after the end of the annual
reporting period. Short-term
employee benefits are recognised
as an expense in the period in
which the employee renders the
related service. Unpaid short-term
benefit liability is measured at an
undiscounted amount.
Similar to IFRS.

32
Employee benefits –
short-term compensated
absences
Short-term employee benefits
include short-term compensated
absences where the absences are
expected to occur within 12 months
after the end of the period in which
service.
There is an inconsistency in
the description of short-term
compensated absences and the
current/non-current classification in
Schedule III. While the description of
short-term employee compensated
absences as per AS 15 refers to
absences that “are expected to
occur within 12 months after
the end of the period in which
service”, as per Schedule III
requirements, for classification as
current liabilities, the absences
should be “due to be settled within
12 months after the reporting date”.
However, the Guidance Note to
the Revised Schedule VI to the
Companies Act, 1956 (Schedule
VI has been superseded by
Schedule III under the Companies
Act, 2013), issued by ICAI, has
clarified that while AS 15 governs
the measurement requirements,
Schedule VI (now Schedule
III) governs the presentation
requirements. Therefore, to the
extent the employee has an
unconditional right to avail the
leave, the same needs to be
classified as current even though a
portion of the same may have to
be measured as other long-term
employee benefits as per AS 15.
Short-term employee benefits
include paid annual leave and paid
sick leave if it is expected to be
settled wholly before twelve months
after the end of the annual reporting
period in which the employees
render the related services.
Similar to IFRS.

actuarial valuation
Similar to IFRS, except that detailed
actuarial valuation to determine
present value of the benefit
obligation is carried out at least
once every three years and fair value
of plan assets are determined at
each balance sheet date.
Detailed actuarial valuation to
determine the present value of the
net defined benefit liability (asset) is
performed with sufficient regularity
so that the amounts recognised
in the financial statements do not
differ materially from the amounts
that would have been determined
at the end of the reporting period.
IAS 19 does not specify sufficient
regularity.
Similar to IFRS.
actuarial gains and losses
All actuarial gains and losses should
be recognised immediately in the
statement of profit and loss.
Actuarial gains and losses
representing changes in the
present value of the defined benefit
obligation resulting from experience
adjustment and effects of changes
in actuarial assumptions are
recognised in other comprehensive
income and not reclassified to profit
or loss in a subsequent period.
Similar to IFRS.
discount rate
Market yields at the balance sheet
date on government bonds are
used as discount rates. The currency
and term of the government
bonds should be consistent with
the currency and estimated term
of the post-employment benefit
obligations.
Post-employment benefit obligations
(both funded and unfunded) are
discounted using a discount rate
determined by reference to market
yields at the end of the reporting
period on high quality corporate
bonds. In countries where there is
no deep market in such bonds, the
market yields on government bonds
denominated in that currency should
be used.
Post-employment benefit obligations
(both funded and unfunded) should
be discounted using a discount
rate determined by reference to
market yields at the end of the
reporting period on government
bonds. However, subsidiaries,
associates, joint ventures and
branches domiciled outside India
should use a rate determined by
reference to market yields on high
quality corporate bonds at the
end of the reporting period. In
case, such subsidiaries, associates,
joint ventures and branches are
domiciled in countries where there
is no deep market in such bonds,
the market yields (at the end of the
reporting period) on government
bonds of that country should be
used. The currency and term of the
government bonds or corporate
bonds should be consistent with
the currency and estimated term
of the post-employment benefit
obligations.

34
defined benefit plans
The changes in defined benefit
liability (surplus) has the following
components:
a) Service cost – recognised in profit
or loss;
b) Interest cost – recognised in profit
or loss;
c) The expected return on any plan
assets – recognised in profit or
loss;
d) Net actuarial gains and losses –
recognised in profit or loss.
The change in the defined benefit
liability (asset) has the following
components:
a) Service cost – recognised in profit
or loss;
b) Net interest cost (i.e. time value)
on the net defined benefit deficit/
(asset) – recognised in profit or
loss;
c) Remeasurement including
i) changes in fair value of plan
assets that arise from factors
other than time value and
ii) actuarial gains and losses on
obligations – recognised in other
comprehensive income.
Similar to IFRS.
termination benefits
Termination benefits are recognised
as a liability and an expense when,
and only when:
• the enterprise has a present
obligation as a result of a past
event;
• it is probable that an outflow of
resources embodying economic
benefits will be required to settle
the obligation; and
• a reliable estimate can be made
of the amount of the obligation.
A termination benefit liability is
recognised at the earlier of the
following dates:
• when the entity can no longer
withdraw the offer of those
benefits – additional guidance is
provided on when this occurs in
relation to an employee's decision
to accept an offer of benefits on
termination and as a result of an
entity's decision to terminate an
employee's employment;
• when the entity recognises
costs for a restructuring under
IAS 37 Provisions, Contingent
Liabilities and Contingent Assets
which involves the payment of
termination benefits.
Similar to IFRS.

past service cost and
curtailments
Past service cost is recognised as
under:
• As an expense on a straight-line
basis over the average period until
the benefits become vested.
• If benefits already vested,
recognised as an expense
immediately.
Entities recognise a curtailment
when it occurs. However when
a curtailment is linked with a
restructuring, it is accounted for
at the same time as the related
restructuring.
Past service cost (includes
curtailments) is recognised as
an expense at the earlier of the
following dates:
• when the plan amendment or
curtailment occurs; and
• when the entity recognises
related restructuring costs or
termination benefits.
Similar to IFRS.
actuarial assumptions –
administration costs
The expected and actual return
on plan assets is arrived at after
deducting expected administrative
costs, other than those included
in the actuarial assumptions used
to measure the defined benefit
obligation. But AS 15 does
not specify which costs should
be included in those actuarial
assumptions.
In determining the return on plan
assets, an entity deducts the costs of
managing the plan assets and any
tax payable by the plan itself, other
than tax included in the actuarial
assumptions used to measure
the defined benefit obligation.
Other administration costs are not
deducted from the return on plan
assets.
Similar to IFRS.
contributions from
employees or third parties
to defined benefit plans
No specific guidance. Provides guidance on accounting
for contributions from employees
or third parties to defined benefit
plans, which are linked to service-
both dependent and independent of
the number of years of service.
Similar to IFRS.
The Limit on a Defined
Benefit Asset, Minimum
Funding Requirements and
their Interaction
No specific guidance. Addresses when refunds or
reductions in future contributions
are regarded as available for
recognition of an asset; how
minimum funding requirements may
affect the availability of reductions
in future contributions and when
minimum funding requirement may
give rise to a liability. It also deals
with prepayments of a minimum
funding requirement.
Similar to IFRS.

36
Government Grants –
primary literature
AS 12 – Accounting for
Government Grants
IAS 20 – Accounting for
Government Grants and
Disclosure of Government
Assistance
SIC 10 – Government
Assistance-No Specific Relation
to Operating Activities
Ind AS 20 – Accounting for
Government Grants and
Disclosure of Government
Assistance
Government Assistance – No
Specific Relation to Operating
Activities
government assistance
Does not deal with disclosure of
government assistance other than in
the form of government grants.
Deals with both government grants
and disclosure of government
assistance.
Similar to IFRS.
forgivable loans
No specific guidance. Forgivable loans are treated as
government grants when there is a
reasonable assurance that the entity
will meet the terms for forgiveness
of the loan.
Similar to IFRS.
government loans with
below market rate of
interest
No specific guidance. Benefit of government loans with
below market rate of interest should
be accounted for as government
grant-measured as the difference
between the initial carrying
amount of the loan determined in
accordance with IFRS 9 and the
proceeds received.
Similar to IFRS.
Government Grants
– recognition
Two broad approaches may be
followed – the capital approach or
the income approach.
Government grants in the nature
of promoters’ contribution i.e. they
are given with reference to the
total investment in an undertaking
or by way of contribution towards
its total capital outlay and no
repayment is ordinarily expected,
are credited directly to shareholders’
funds. Grants related to revenue are
recognised in the statement of profit
and loss on a systematic and rational
basis over the periods necessary to
match them with the related costs.
Government grants are recognised
as income to match them with
expenses in respect of the related
costs for which they are intended to
compensate on a systematic basis.
Government grants are not directly
credited to shareholders’ interests.
Government grants related to assets
are presented in the statement of
financial position either by setting
up the grant as deferred income or
by deducting the grant in arriving at
the carrying amount of the asset.
Similar to IFRS. However, grants
related to assets, including
non-monetary grants at fair value,
should be presented in the balance
sheet only by setting up the grant as
deferred income.

recognition (continued)
Grants relating to non-depreciable
assets are credited to capital reserve.
If such grants require fulfilment
of some obligation, such grants
should be credited to income over
the period over which the cost of
meeting the obligation is charged
to income. Grants related to
depreciable assets are either treated
as deferred income and transferred
to the statement of profit and loss
in proportion to depreciation, or
deducted from the cost of the asset.
non-monetary government
grants
If the asset is given by the
Government at a discounted price,
the asset and the grant is accounted
at the discounted purchase price.
Non-monetary grants free of cost
are accounted for at nominal values.
The asset and the grant may be
accounted at fair value. Alternatively,
these can be recorded at nominal
amount.
The asset and the grant should be
accounted at fair value.
repayment of grants
relating to fixed assets
Recognised either by increasing
the carrying amount of the asset
or reducing the deferred income
or capital reserve, as appropriate,
by the amount repayable. If the
carrying amount of the asset is
increased, depreciation on the
revised carrying amount is provided
prospectively over the residual useful
life of the asset.
Classified as an extraordinary item.
Recognised either by increasing the
carrying amount of the asset or
reducing the deferred income by
the amount repayable. Cumulative
depreciation that would have been
recognised in profit or loss to date
in the absence of grant should be
recognised immediately in profit or
loss.
Prohibited to be classified as an
extraordinary item.
Recognised by reducing the deferred
income balance by the amount
repayable.
Prohibited to be classified as an
extraordinary item.

38
Foreign Exchange –
primary literature
AS 11 – The Effects of Changes
in Foreign Exchange Rates
IAS 21 – The Effects of Changes
in Foreign Exchange Rates
Ind AS 21 – The Effects of
Changes in Foreign Exchange
Rates
Effects of Changes in
Foreign Exchange Rates –
functional and presentation
currency
Foreign currency is a currency other
than the reporting currency which
is the currency in which financial
statements are presented. There is
no concept of functional currency.
Functional currency is the
currency of the primary economic
environment in which the entity
operates. Foreign currency is a
currency other than the functional
currency.
Presentation currency is the currency
in which the financial statements are
presented.
Similar to IFRS.
exchange differences
Similar to IFRS except that there is
a limited period irrevocable option
for corporate entities to capitalise
exchange differences on long-term
foreign currency monetary
items incurred for acquisition of
depreciable capital assets and to
amortise exchange differences on
other long-term foreign currency
monetary items over the life of such
items but not beyond the stipulated
date.
Exchange differences on monetary
items that in substance, form part of
net investment in a non-integral
foreign operation, are recognised
in ‘Foreign Currency Translation
Reserve’ both in the separate and
consolidated financial statements
and recognised as income or
expense at the time of disposal of
that operation.
Exchange differences arising on
translation or settlement of foreign
currency monetary items are
recognised in profit or loss in the
period in which they arise.
Exchange differences on monetary
items, that in substance, form
part of net investment in a foreign
operation, are recognised in profit or
loss in the period in which they arise
in the separate financial statements
and in other comprehensive income
in the consolidated financial
statements and reclassified from
equity to profit or loss on disposal of
the net investment.
Similar to IFRS. However, an entity
may continue the policy adopted for
exchange differences arising from
translation of long-term foreign
currency monetary items recognised
in the financial statements for the
period ending immediately before
the beginning of the first Ind AS
financial reporting period as per
previous GAAP.

Effects of Changes
in Foreign Exchange
Rates – translation in the
consolidated financial
statements
Translation of financial statements of
a foreign operation to the reporting
currency of the parent/investor
depends on the classification of that
operation as integral or non-integral.
In the case of an integral foreign
operation, monetary assets
are translated at closing rate.
Non-monetary items are translated
at historical rate if they are valued at
cost. Non-monetary items which are
carried at fair value or other similar
valuation are reported using the
exchange rates that existed when
the values were determined. Income
and expense items are translated
at historical/average rate. Exchange
differences are taken to the statement
of profit and loss.
For non-integral foreign operations,
closing rate method should be
followed (i.e. all assets and liabilities
are to be translated at closing rate
while profit and loss account items
are translated at actual/average rates).
The resulting exchange difference is
taken to reserve and is recycled to
profit and loss on the disposal of the
non-integral foreign operation.
Treatment for disposal does not
depend on whether control over a
foreign subsidiary is lost or not. Even
if control is lost, only proportionate
amount of the reserve is recycled to
statement of profit and loss.
Assets and liabilities should be
translated from functional currency to
presentation currency at the closing
rate at the date of the statement of
financial position; income and expenses
at actual/average rates for the period;
exchange differences are recognised
in other comprehensive income and
accumulated in a separate component
of equity. These are reclassified
from equity to profit or loss (as a
reclassification adjustment) when the
gain or loss on disposal is recognised.
Treatment of disposal depends
on whether control is lost or not.
Thus, if control is lost, the exchange
difference attributable to the parent is
reclassified to profit or loss from foreign
currency translation reserve in other
comprehensive income.
Similar to IFRS.
scoping for derivatives
AS 11 is applicable to exchange
differences on all forward exchange
contracts including those entered into
to hedge the foreign currency risk of
existing assets and liabilities and is not
applicable to the exchange difference
arising on forward exchange contracts
entered into to hedge the foreign
currency risks of future transactions in
respect of which firm commitments
are made or which are highly probable
forecast transactions.
Foreign currency derivatives that are
not within the scope of IAS 39 (e.g.
some foreign currency derivatives that
are embedded in other contracts) are
within the scope of IAS 21. In addition,
IAS 21 applies when an entity translates
amounts relating to derivatives from its
functional currency to its presentation
currency.
Similar to IFRS.

40
forward exchange contracts
•
Forward exchange contracts not
intended for trading or speculation
purposes:
i) Any premium or discount arising
at the inception of a forward
exchange contract is amortised
as expense or income over the
life of the contract.
ii) Exchange differences on such
a contract are recognised in
the statement of profit and
loss in the reporting period
in which the exchange rates
change. Exchange difference
on a forward exchange contract
is the difference between (a)
the foreign currency amount of
the contract translated at the
exchange rate at the reporting
date, or the settlement date
where the transaction is settled
during the reporting period, and
(b) the same foreign currency
amount translated at the latter
of the date of inception of the
forward exchange contract and
the last reporting date.
• Forward exchange contract
intended for trading or speculation
purposes:
The premium or discount on the
contract is ignored and at each
balance sheet date, the value of
the contract is marked to its current
market value and the gain or loss
on the contract is recognised.
Accounted for as a derivative. Similar to IFRS.
Foreign Exchange Rates
– change in functional
currency
Change in reporting currency is not
dealt with in AS 11, though reason for
change is required to be disclosed.
Change in functional currency is applied
prospectively. The fact of change in
functional currency and the reason
for the change in functional currency
should be disclosed.
Similar to IFRS. Additionally, the
date of change in functional
currency is also required to be
disclosed.

Borrowing Costs –
primary literature
AS 16 – Borrowing Costs IAS 23 – Borrowing Costs Ind AS 23 – Borrowing Costs
Borrowing Costs – scope No such scope exception similar to
IFRS/Ind AS is available.
Borrowing costs need not be
capitalised in respect of i) qualifying
assets measured at fair value (e.g.
biological assets) ii) inventories that
are manufactured, or otherwise
produced, in large quantities on
a repetitive basis (even if they are
otherwise qualifying assets). This is
an option.
Similar to IFRS.
Borrowing Costs –
components of borrowing
costs
No reference to effective interest
rate.
Description of specific components
are linked to effective interest rate.
Similar to IFRS.

42
Related Party
Disclosures – primary
literature
AS 18 – Related Party Disclosures IAS 24 – Related Party
Disclosures
Ind AS 24 – Related Party
Disclosures
Related Party Disclosures –
definition of related party
Parties are considered to be related
if at any time during the reporting
period one party has the ability to
control the other party or exercise
significant influence over the other
party in making financial and/or
operating decisions.
A related party is a person or entity
that is related to the entity that is
preparing its financial statements
(reporting entity):
a)
A person or a close member of
that person’s family is related to a
reporting entity if that person:
i)
has control or joint control of
the reporting entity;
ii)
has significant influence over
the reporting entity; or
iii)
is a member of the key
management personnel of the
reporting entity or of a parent
of the reporting entity.
b)
An entity is related to a reporting
entity if any of the following
conditions apply:
i)
The entity and the reporting
entity are members of the same
group (which means that each
parent, subsidiary and fellow
subsidiary is related to the
others).
ii)
One entity is an associate or
joint venture of the other entity
(or an associate or joint venture
of a member of a group of
which the other entity is a
member).
iii)
Both entities are joint ventures
of the same third party.
iv)
One entity is a joint venture
of a third entity and the other
entity is an associate of the
third entity.
Similar to IFRS.

definition of related party
(continued)
v)
The entity is a post-
employment benefit plan
for the benefit of employees
of either the reporting
entity or an entity related
to the reporting entity. If
the reporting entity is itself
such a plan, the sponsoring
employers are also related to
the reporting entity.
vi)
The entity is controlled or
jointly controlled by a person
identified in a).
vii)
A person identified in a) i) has
significant influence over the
entity or is a member of the
key management personnel
of the entity (or of a parent of
the entity).
viii)
The entity, or any member of
a group of which it is a part,
provides key management
personnel services to the
reporting entity or to the
parent of the reporting entity
(this is effective for annual
periods beginning on or after
1 July 2014).
Related Party – definition of
close member of the family
No definition of close member of the
family. Instead the term “relative”
has been defined in relation to
an individual as the spouse, son,
daughter, brother, sister, father,
mother who may be expected to
influence, or be influenced by, that
individual in his/her dealings with the
reporting enterprise.
Close members of the family of a
person are those family members
who may be expected to influence,
or be influenced by, that person in
their dealings with the entity and
include: a) that person’s children
and spouse or domestic partner; b)
children of that person’s spouse or
domestic partner; and c) dependants
of that person or that person’s
spouse or domestic partner.
Similar to IFRS with the inclusion of
father, mother, brother and sister in
the definition of close members of
the family.
post-employment benefit
plans
Post-employment benefit plans are
not included as related parties.
Related party includes
post-employment benefit plans for
the benefit of employees of the
reporting entity or any entity that is
related to the reporting entity.
Similar to IFRS.

44
Related Party Disclosures
– exemptions
Disclosure requirements do not
apply if providing such disclosures
would conflict with an enterprise’s
duties of confidentiality as specifically
required in terms of a statute or by
any regulator or similar competent
authority.
Also, no disclosure is required in
the financial statements of a state-
controlled enterprise as regards
related party relationships with other
state-controlled enterprises and
transactions with such enterprises.
Some minimum disclosures should
be made by government-related
entities.
Disclosures which conflict with
confidentiality requirements of
statute/regulations are not required
to be made.
items to be disclosed
If an entity has related party
transactions during the period
the enterprise should disclose the
volume of transactions either as
an amount or as an appropriate
proportion and amounts or
appropriate proportions of
outstanding items.
If an entity has related party
transactions during the period
the amount of such transactions and
the amount of outstanding balances
including commitments need to be
disclosed.
Similar to IFRS.
key management personnel
Compensation of key management
personnel is disclosed in total
as an aggregate of all items of
compensation except when a
separate disclosure is necessary for
the understanding of the effects of
related party transactions on the
Compensation of key management
personnel is disclosed in total
and separately for a) short-term
employee benefits; b) post-
employment benefits; c) other
long-term benefits; d) termination
benefits; and e) share-based
payments.
Similar to IFRS.

Investments in
Associates and Joint
Ventures – primary
literature
AS 23 – Accounting for
Investments in Associates
in Consolidated Financial
Statements
IAS 28 (Revised 2011) –
Investments in Associates and
Joint Ventures
Ind AS 28 – Investments in
Associates and Joint Ventures
and Joint Ventures –
significant influence
Significant influence is the power
to participate in the financial and/
or operating policy decisions of the
investee but not control over those
policies.
Significant influence is the power
to participate in the financial and
operating policy decisions of the
investee but is not control or joint
control over those policies.
Similar to IFRS.
potential voting rights
Potential voting rights are not
considered in assessing significant
influence.
The existence and effect of potential
voting rights that are currently
exercisable or convertible, including
potential voting rights held by
another entity, are considered when
assessing significant influence.
Similar to IFRS.
and Joint Ventures – equity
method
As per AS 23, equity method is
applicable only when the entity
has subsidiaries and prepares
consolidated financial statements.
However, as per Companies Act,
2013, consolidated financial
statements should be prepared,
even if an entity has only associates
and/or joint ventures but has
no subsidiaries. For financial
year ending 31 March 2015, if
a company does not have any
subsidiaries, but only has associates
and/or joint ventures, then the
company would not have to prepare
consolidated financial statements
in respect of such associates and/
or joint ventures. (Refer the topic
‘Consolidated Financial Statements
- scope’).
Even if consolidated financial
statements are not prepared
(e.g. because the investor has no
subsidiaries) equity accounting is
used.
IFRS 5 is applied to an investment,
or a portion of an investment in an
associate that meets the criteria to
be classified as held for sale.
Similar to IFRS.

46
and Joint Ventures – scope
Currently there is no exemption
for investments made by venture
capital organisations, mutual funds,
unit trusts and similar entities from
applying the equity method.
Investments by venture capital
organisations, mutual funds, unit
trusts and similar entities including
investment-linked insurance funds
are exempted from applying equity
method, if an election is made to
measure such investments at FVTPL
in accordance with IFRS 9 or IAS 39
where the entity is yet to apply IFRS
9. If this election is made, certain
disclosure requirements have to be
complied with.
IAS 28 provides exemptions from
applying the equity method similar
to exemptions provided in IFRS 10
– Consolidated Financial Statements
(Refer the topic 'Consolidated
Financial Statements - scope')
Similar to IFRS.
and Joint Ventures – share
of losses
Loss in excess of the carrying
amount of investment is not
recognised, unless the investor
has incurred obligations or made
payments on behalf of the associate
to satisfy obligations of the associate
that the investor has guaranteed or
to which the investor is otherwise
committed.
Losses recognised in excess of the
interest in the investment are not
recognised.
The ‘interest’ is the carrying amount
of investment determined using
the equity method together with
any long-term interest that, in
substance, form part of the entity’s
net investment in the associate.
Losses recognised using the equity
method in excess of the entity’s
investment in ordinary shares are
applied to the other components of
the entity’s interest in an associate
in the reverse order of their seniority
(i.e. priority in liquidation).
After the entity’s interest is
reduced to zero, additional losses
are provided for, and a liability is
recognised, only to the extent that
the entity has incurred legal or
constructive obligations or made
payments on behalf of the associate.
Similar to IFRS.

transactions between
investor and the associate
Unrealised profits and losses
resulting from transactions between
the investor (or its consolidated
subsidiaries) are eliminated to the
extent of the investor’s interest in
the associate. Unrealised losses
should not be eliminated if and to
the extent the cost of the transferred
asset cannot be recovered.
Investor’s share in the gains or
losses resulting from upstream and
downstream transactions involving
assets that do not constitute a
‘business’ as defined in IFRS 3
between the investor (including
its consolidated subsidiaries) and
its associate are eliminated. When
downstream transactions provide
evidence of impairment, the
losses are recognised in full. When
upstream transactions provide
evidence of impairment, the investor
should recognise its share of loss.
Gain or loss resulting from a
downstream transaction involving
assets that constitute a ‘business’
as defined in IFRS 3 between the
investor (including its consolidated
subsidiaries) and its associate is
recognised in full in the investor’s
Similar to IFRS.
and Joint Ventures
– disposals
No specific guidance. When an investor discontinues
the use of the equity method (for
example, as a result of a change in
ownership), the investment retained
is remeasured to its fair value,
with the gain or loss recognised in
profit or loss. Thereafter, IFRS 9 or
IAS 39 is applied to the remaining
holding unless the investment
becomes a subsidiary in which case
the investment is accounted for in
accordance with IFRS 3.
Similar to IFRS.
and Joint Ventures
– goodwill
Goodwill arising on the acquisition
of an associate by an investor should
be included in the carrying amount
of investment in the associate but
should be disclosed separately.
Goodwill (i.e. excess of the cost of
the investment over the investor’s
share of the net fair value of the
associate’s identifiable assets and
liabilities) is included in the carrying
amount of the investment.
Similar to IFRS.

48
and Joint Ventures – capital
reserve/negative goodwill
Capital reserve arising on the
acquisition of an associate by an
investor should be included in the
carrying amount of investment
in the associate but should be
disclosed separately.
Any excess of the investor’s share
of net fair value of the associate’s
identifiable assets and liabilities over
the cost of investments is included
as income in the determination of
the investor’s share of associate’s
profit or loss in the period in which
the investment is acquired.
Any excess of the investor’s share of
the net fair value of the associate’s
identifiable assets and liabilities
over the cost of the investment
is recognised directly in equity as
capital reserve in the period in which
the investment is acquired.
uniform accounting policies
If not practicable to use uniform
accounting polices while applying
the equity method, that fact should
be disclosed together with a brief
description of the differences
between the accounting policies.
Uniform accounting policies should
be followed while applying the
equity method. No exception is
provided.
Uniform accounting policies to be
followed unless impracticable to
do so.
reporting date
The maximum difference between
the reporting date of the associate
and that of the parent is not
specified.
The difference between the
reporting date of the associate and
that of the investor should be no
more than three months.
Similar to IFRS.
separate financial
statements of the investor
At cost less impairment loss, if
any, as per AS 13 – Accounting for
Investments.
Either at cost or as an investment in
accordance with IFRS 9 or
IAS 39 (if the entity is yet to apply
IFRS 9) or using the equity method
as described in IAS 28, Investments
in Associates and Joint Ventures.
(The option to use the equity
method will be applicable for annual
periods beginning on or after 1
January 2016.)
Similar to IFRS, except that equity
method is not permitted in the
separate financial statements.

Reporting in
Hyperinflationary
Economies – primary
literature
There is no equivalent standard. IAS 29 – Financial Reporting in
Hyperinflationary Economies
IFRIC 7 – Applying the
Restatement Approach under
IAS 29
Ind AS 29 – Financial Reporting
in Hyperinflationary Economies
Applying the Restatement
Approach under Ind AS 29
Financial Reporting
in Hyperinflationary
Economies
– hyperinflationary
There is no equivalent standard. Generally an economy is
hyperinflationary when the
cumulative inflation rate over 3 years
is approaching or exceeds 100%.
Similar to IFRS.
Financial Reporting
Economies – basic principle
There is no equivalent standard. Financial statements should be
stated in terms of the measuring
unit current at the end of the
reporting period.
Comparative figures for prior
period(s) should be restated into the
same current measuring unit.
Similar to IFRS.
Financial Reporting
Economies – disclosure
There is no equivalent standard. The following disclosures are
required:
-
the fact that the financial
statements and the corresponding
figures for previous periods have
been restated for the changes in
the general purchasing power of
the functional currency and, as a
result, are stated in terms of the
measuring unit current at the end
of the reporting period;
-
whether the financial statements
are based on a historical cost
approach or a current cost
approach; and
-
the identity and level of the price
index at the end of the reporting
period and the movement in the
index during the current and the
previous reporting period.
Similar to IFRS. However there is
an additional disclosure required
regarding duration of the
hyperinflationary situation existing in
the economy.

50
Financial Reporting
Economies – restatements
There is no equivalent standard. Restatements are made by applying
a general price index. Items such
as monetary items that are already
stated at the measuring unit at the
end of the reporting period are not
restated. Other items are restated
based on the change in the general
price index between the date those
items were acquired or incurred and
the end of the reporting period.
A gain or loss on the net monetary
position is included in net income. It
should be disclosed separately.
Similar to IFRS.
Applying the Restatement
approach under IAS 29
There is no equivalent standard. When the economy of an entity’s
functional currency becomes
hyperinflationary, IAS 29 is applied
as if the economy was always
hyperinflationary.
Similar to IFRS.

Financial Instruments:
Presentation – primary
literature
AS 31 – Financial Instruments:
Presentation
Note that this standard has
not been notified under
the Companies (Accounting
Standards) Rules, 2006. For
the current status on the
applicability of AS 31, see the
caption 'Financial Instruments –
primary literature'.
Since the above mentioned
standard is not yet mandatory,
the differences discussed
below are based on the existing
Indian Standards and generally
accepted accounting practices.
IAS 32 – Financial Instruments:
Presentation
Ind AS 32 – Financial
Instruments: Presentation
Presentation – classification
of financial liabilities
Financial instruments are classified
based on legal form – redeemable
preference shares will be classified
as equity.
Preference dividends are always
recognised similar to equity dividend
and are never treated as interest
expense.
Financial instruments are classified
as a liability or equity according to
the substance of the contractual
arrangement, (and not its legal
form), and the definition of financial
liabilities and equity instruments.
Dividends on financial instruments
classified as financial liability is
recognised as an interest expense
in the statement of profit or loss
and other comprehensive income.
Hence if preference shares meet the
definition of financial liability, the
dividend is treated as an interest
expense.
Similar to IFRS.
Presentation – treasury
shares
Acquiring own shares is permitted
only in limited circumstances. Shares
repurchased should be cancelled
immediately and cannot be held as
treasury shares.
Cost of treasury shares is deducted
from equity and resales of treasury
shares are equity transactions.
Costs of issuing or reacquiring equity
instruments are accounted for as a
deduction from equity, net of any
related income tax benefit.
Similar to IFRS.

Indian GAAP, IFRS and Ind AS - A Comparison

Indian GAAP, IFRS and Ind AS - A Comparison

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